Supply Functions for Cotton in Imperial Valley, California

This article reports the results of an analysis of cotton supply response for Imperial Valley, California, one of the two distinct cotton growing areas in the State. Ultimately, these results for the Imperial Valley can be combined with similar studies now in progress throughout the United States to form a comprehensive picture of cotton supply response. However, the two more immediate objectives of the paper are: (1) To provide empirical estimates of the supply of cotton which would be forthcoming from the Imperial Valley at various prices, both in the short and the long run; and (2) to indicate the methodology used in handling certain problems commonly faced by supply analysts, in the hope that these procedures will prove directly applicable or suggestive of possible alternatives in other empirical situations. Two unique additions to the linear programming methodology are illustrated in this study. The first is the use of Markov chains to project changes in the farm size distribution to 1975. The second is an adjustment of the cotton supply function for associated changes in the price and production of winter lettuce, a major competing crop. This is Giannini Foundation Paper No. 231. The authors gratefully acknowledge the contribution of William R. Burton, research assistant at California, who assisted in much of the basic empirical analysis.